Nervous system development requires balance between the regeneration of neural progenitor cells (NPCs) through proliferation and the specification and differentiation of NPCs, and this balance is likely controlled by both intrinsic and extrinsic pathways. Premature differentiation or excessive proliferation of the NPCs results in aberrant tissue development. Jo et al. used the mouse retina as a model to study the effect of loss of function of the lipid and protein phosphatase Pten, which results in excessive activation of the kinase Akt. Postmitotic retinal neurons showed enhanced phosphorylation (activation) of Akt compared with retinal progenitor cells (RPCs). Targeted deletion of Pten in distal RPCs (and the cells that differentiate from these progenitors) (Pten-cko) resulted in a larger region of Pten-cko cells in the embryonic retina than was predicted and was associated with reduced numbers of apoptotic cells and increased numbers of proliferating cells in the embryonic retina, suggesting that both cell survival and proliferation contributed to this expansion of the Pten-cko cells beyond the expected boundary. However, in postnatal animals, there was a reduction in the number of proliferating cells in the Pten-cko retinas compared with retinas from control animals, suggesting that hyperproliferation of RPCs occurred during embryonic development and then the ability to proliferate was lost postnatally. Although by postnatal day 8, neurons that differentiated earlier during development appeared unaffected, there was a reduction in the number of later-developing neurons in the Pten-cko retinas. During embryonic stages, there was an increase in the numbers of early- and late-developing retinal neurons and premature detection of a neuronal marker in RPCs in the Pten-cko retinas. Notch signaling, which involves cleavage of Notch to form the transcriptional regulator fragment the Notch intracellular domain (NICD), is one pathway that regulates specification of neuronal identity in RPCs. Akt activity and the presence of the product of Notch target gene Hes1 were mutually exclusive, suggesting that Akt may suppress Notch signaling. Indeed, analysis of retinal lysates from Pten-cko and control mice showed that the formation of the active NICD transcriptional complex was reduced in the Pten-cko samples. Ectopic expression of NICD restored the numbers of late-developing neurons in the postnatal Pten-cko retinas. Furthermore, in rat retinal progenitor cells in culture, introduction of a constitutively active Akt reduced the expression of a Notch reporter gene in response to coexpressed NICD. Thus, the phosphoinositide 3-kinase–Akt pathway appears to limit Notch signaling to maintain the proper balance of RPCs during retinal development.